Average earnings growth is forecast at 3% in 2015, 3.75% in 2016, 4.25% in 2017

Commenting on the Bank of England inflation report and related information published on ‘Super Thursday’, David Kern, Chief Economist at the British Chambers of Commerce said:

“Strong growth forecasts, lower predictions for inflation and a clearer signal that the Bank of England will not rush to raise interest rates too quickly are all good news for business confidence.

“The voting decisions of the MPC – with only one member supporting a rate rise – indicate that the vast majority wish to take a prudent stance. This is reinforced by the fact that the Bank of England’s latest inflation projections are lower than previously expected and their predication that growth in employment, which is still strong, will be less buoyant than envisioned three months ago

“While the Bank of England’s growth forecasts are more optimistic than our own, they support our view that higher growth remains consistent with low inflation. It is reassuring then that by the end of 2016 inflation will still be below the 2% target.

“Today’s report will put business minds to rest on the prospect of an early rate rise, and the government should now focus on growth enhancing policies.”